Lehigh Valley College facing state probe

The state attorney general's office wants Lehigh Valley College to turn over records on the embattled school's financial aid policies, recruitment practices and student complaints.

The request, postmarked July 20, might mark the beginning of an investigation into the school by the attorney general's Bureau of Consumer Protection.

On Tuesday, Lehigh Valley College President Virginia Carpenter said the for-profit school will comply with the state's request for information by the end of the month.

"We intend to fully cooperate. We're really looking forward to this as an opportunity to share what our practices are," she said.

Barbara Petito, press secretary for the attorney general's office, would not discuss the situation, saying to do so would violate the state's policy.

The attorney general's office typically will not confirm or deny whether it is investigating a case.

The Morning Call reported in April that Lehigh Valley College, formerly known as Allentown Business School, used hard-sell sales tactics to boost enrollment. The newspaper's investigation, based on documents and interviews with more than 30 former and current students and staff members, included accusations that the school turned a blind eye to cheating and failure to keep students in class and that its jobs placement services fall short of its sales pitch.

In May, The Morning Call reported that college advisers frequently steered students toward high-interest loans. The steep interest rates coupled with high tuition and fees -- $30,400 to $37,500 for an associate degree, compared with $5,400 to $5,640 at the area's community colleges -- left many students with heavy debt.

Some students of Lehigh Valley College now have Sallie Mae loans carrying 15.375 percent interest -- a rate normally associated with credit cards, not student loans, which generally average 3 percent to 7 percent.

The college said then that high-interest loans are used only when cheaper alternatives such as federal student aid and parental loans have been exhausted.

In a news conference about quarterly earnings on Monday, Janice Block, a lawyer for Lehigh Valley College's parent company, Career Education Corp., said the attorney general's request might have been instigated by stories in The Morning Call.

"Speculation is that it could very well stem from the series of negative articles," Block said.

While Petito would not discuss the Lehigh Valley College letter, she did say that "if students feel misled" by Lehigh Valley College, they should contact the bureau to file a complaint. Investigations usually begin after the bureau has received a complaint and the bureau normally starts an investigation by sending a letter to the business in question, she said.

In June, Maggie Snell, 21, of Emmaus told The Morning Call she filed a complaint with the bureau. Snell said the college gave her false and incomplete information about interest rates.

The Bureau of Consumer Protection receives approximately 30,000 complaints a year about deceptive sales practices, predatory lending cases, illegal debt collection, diploma mills, and other types of consumer fraud.

The bureau tries to help the parties involved reach an out-of-court resolution, Petito said, but if there are numerous complaints about a company, the bureau may take the case to court.

"The bulk [of cases] are resolved through mediation. But when there are cases we are unable to successfully mediate and there's a clear pattern of illegal activity involving many consumers, then we will pursue legal action," she said.

Lehigh Valley College has 1,350 students at its two-year-old building in Center Valley. The school awards associate degrees after 18 months of study. Its programs range from computer networking to massage therapy.

Unlike traditional colleges, it's a for-profit school. Shares of parent company Career Education, based in Hoffmann Estates, Ill., trade on the New York Stock Exchange. Career Education, the second-largest U.S. chain of for-profit colleges, is being investigated by the U.S. Department of Education for its financial results for 2000 to 2003. The Education Department is preventing Career Education from applying to open new locations until that investigation is completed.

Officials for Career Education did not respond to interview requests on Tuesday.